A relative asked me what’s the BEST stock to buy. The reason is because so many of her colleagues are now talking about stock and saying how much they have earned from buying and selling. Another relative working in bank sends her all the potential stocks everyday. I told her, I do not know. If I know, why am I still waking up early and working till 6pm everyday? She laughed and I laughed too.
Today, the equity market is volatile even though it has been on a rising trend. The property market has slowed down tremendously but prices have barely moved as can be seen from the average property prices. The Fixed deposit rate is still ever so slow. Unit trust needs time because if you were to buy into equity type of unit trusts today, it meant that you are buying at quite a high entry point. Many are still waiting for the affordable schemes by so many different parties, from the state to the federal governments. If the scheme is the very low end, the middle income class do not want to register. Yet, for the properties which are priced higher, say RM400,000, some may feel this is too high.
So, perhaps doing nothing is best, today? Perhaps keeping cash is best so that we can wait for the right opportunity? Haha. May I ask, what kind of opportunity are we supposed to wait? For the whole market to fall? Say, the years of 1997/1998? Think objectively, are you sure you want that to happen, if you are an employee and you are in the middle income group? Since keeping cash is not, perhaps put it into fixed deposit for some returns? Well, truth is, if you already have RM1,000,000 or higher, I think keeping is FD is still ok. It should give you around RM3,000 plus per month. If however you have just RM50,000 and you have a very stable job, perhaps your goal should be to evaluate carefully and buy your first property.
RM300,000 for a condo? Depending on area, yes there are still available units. Buy one, stay there, stop renting. Save more for whatever you want to know but once you have bought that property, you have just forced yourself to save for your future. I do not think you would have the appetite to buy an expensive car which may cause you to go bankrupt. The number one cause for bankruptcy in Malaysia is still due to vehicle hire purchase. Of course, if you trust your unit trust friend, you can also put that amount into unit trust but it will at best be double that of your FD within the next few years. Over a much longer period, I really do not dare to say if the return would be enough to help you buy your first property. Okay, actually there are MANY things you can do but doing nothing is NOT a strategy. Happy deciding.
written on 21 Apr 2015
Next suggested article: Bankruptcy before property, not after property, perhaps.